[Source: Zinus Inc.]

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The value of Zinus Inc., South Korean mattress maker with a strong U.S. presence, may go beyond $1 billion as international capital join the buyout race that so far had been favorable for SK Networks Co.

Multinational names Blackstone, Bain Capital and CVC Capital Partners have tapped Zinus’s sale advisor for the stake offering in the Korean mattress maker, according to investment bank industry sources on Monday.

The PEFs and retailers at home have suddenly shown interest after SK Networks confirmed it was mulling purchase of stake in the online mattress distributor.

It was speculated to have offered around 1 trillion won ($857.9 million) for a controlling stake through purchase of 600 billion won worth in existing shares and another 400 billion won in new shares.

About 40 percent stake from Zinus Chairman Lee Yoon-jae, owning 35.31 percent, and other shareholders could be offered. Lee would stay on the managing board as the second largest shareholder.

Zinus stock’s price-to-earnings ratio (P/E ratio) for 2022 stands at 10.3x, the lowest since its market listing, noted Korea Investment & Securities analyst Kim Myung-joo in a report published last month.

The stock is cheap compared to not only other Korean furniture companies but also its rivals in the U.S. the report found.

Zinus has come to command the largest share of 30 percent in U.S. online mattress sales since it began online marketing via Amazon.com in 2013. The U.S. online mattress market still has room to grow as online sales is projected to make up 15.8 percent of the country’s total mattress market in 2022, whereas the ratio is 40 percent in Korea.

Zinus also has been showing steady growth in earnings. Its operating profit rose from 53.1 billion won in 2018 to 103.9 billion won in 2019, and 86.7 billion won in Covid-19 stricken year of 2020. Revenue grew to 621.8 billion won, 817.1 billion won, and 989.5 billion won, respectively.

SK Networks remains as the strongest contender as it can create synergy with its home appliance rental and chemicals trading businesses, the analyst added.

On Tuesday, Zinus shares closed 4.94 percent lower at 75,000 won.

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